A group of investors with local roots bets big on Gulf Coast land

Nathan Cox is one of four partners behind the Gulf Coast Opportunities Fund, a private equity firm, that has been snatching up distressed real estate along the Gulf Coast. The fund has more than 100 investors, and according to reports has purchased about $55 million in real estate since forming in April 2012. Cox is pictured in the Rayne Plantation development with ongoing residential construction Thursday, August 15, 2013, in Spanish Fort, Ala. (Mike Kittrell/mkittrell@al.com)

BALDWIN COUNTY, Alabama --

In the wayward world of real estate it helps to have the one thing banks covet the most: cold hard cash — and plenty of it.

Cullen Thompson, Billy Stimpson and Ralph Reynolds are the three founders of Bienville Capital Management, an investment and advisory firm that started the Gulf Coast Opportunities Fund to purchase high-value land and make it shovel-ready for development.

All three of them and Nathan Cox are general partners in the fund.

Each of them also attended UMS-Wright Preparatory School in Mobile. Only Cox, who lives in Spanish Fort, still permanently resides in the area.

Since raising nearly $62 million in private equity, the partners behind the Gulf Coast Opportunities Fund, have been snagging properties — all of it at distressed prices — between the Alabama coast and the Florida panhandle.

But a majority of their handiwork can be seen in Baldwin County.

Gulf-front developments that were once in the eyes of homebuilders, then left cold, have been bought at a fraction of the cost.

Now, after the Gulf of Mexico oil spill, and a mortgage and credit crisis stagnated development mid-stream, the “A-quality” properties are finally drying up, according to Cox. And the fund, he says, is well-positioned to capitalize on the next development boom.

The benefits could be huge — for the fund’s investors and coastal Alabama, which has been starved of major real estate development.

In the months after forming the GCOF, more than 100 investors doled out cash from around the world, hoping to bank on the region’s potential. The fund exceeded the mere $50 million they intended to raise by about $11 million.

“We could have raised quite a bit more,” said Cullen Thompson, a native of Mobile who now divides his time between New York and Los Angeles. Thompson said they hope to double or triple the fund’s capital over a 2- to 6-year period.

Investors found the presence of Airbus EADS and Austal USA, among others, attractive. Steady population growth in Baldwin County, which grew by 4.7 percent from April 2010 to July 2012, was another good indicator.

But most of all was the roster of beach-front land that could be bought at bargain basement prices.

“We knew there were a couple of properties on the beach that we wanted to own,” Thompson said. “There was a lot of low hanging fruit.”

In September 2012, they paid $9.7 million for 9 acres of Gulf-front land on Ala. 161 in Orange Beach. It was the former site of the Mandalay Beach, a condo development that never materialized.

Many of the well-known distressed housing markets around the country did not have a problem attracting investors to come in and clean out the surplus inventory, Thompson said.

The Gulf, unlike South Florida and areas of Arizona, was not flooded with investors. “We were serving as a liquidity provider to the area,” Thompson said.

In December 2012, they purchased the Fairhope Falls subdivision for $2 million and partially developed lots off Baldwin County 64 in Daphne for $1.2 million, past reports show.

“We have seen the way the beach has matured,” Thompson said. “It’s only once in a few decades that you can scoop up some attractive property in that area.”

Their plan is simple: purchase property at low prices and turn the land into ready-for-construction building sites.

But Cox and Thompson both agree that there could be a future in building construction, as palatable foreclosures dwindle and prices rise.